Publishing tax returns would trigger a jealous backlash on social media, a
leading Conservative MP has said, as pressure mounts on politicians to
reveal details of their tax arrangements.

Ian Liddell-Grainger, the Conservative chairman of the All Party Group on Tax, said a Scandinavian model under which people's tax returns were public documents would be unfair and could trigger "jealousy."

"If you put up people's tax returns just willy-nilly across the United Kingdom, then you get the envious factor coming in. You'll get the jealousy. People like myself will be dealing with people whose names have been put on internet sites, Twitter and Facebook," he said.

"I don't think that's fair on people. They do pay tax. People don't know what their neighbours are doing these days. Why drag them through the mire if they don't need to be?"

The Prime Minister is understood to be "very relaxed" about publishing his tax returns and believes the "time is coming" for politicians to be more open about their personal finances. However he is unsure how any system might work.

Mr Cameron is known to have discussed the issue a number of times with George Osborne, the Chancellor, who said last week that he had not “set his face against” disclosure.

In an interview with The Daily Telegraph, Mr Osborne said the Government would “think through” making senior politicians reveal their tax returns but that he would be “very happy” to consider the proposal.

Last night, David Davis, the former shadow home secretary, said that while he opposed the publication of personal tax records, any proposal should also cover the disclosure of other wealth.

He said: “This will induce the politics of envy – but if you are going to do it, you have got to cover everything: wealth, trusts, whether you are a beneficiary of trusts, whether you are going to inherit things." That would reveal the true extent of the wealth of the Prime Minister and his Cabinet.

The row over taxation arrangements of candidates has dominated the London Mayoral election. Ken Livingstone has been accused of channeling media earnings through a company to avoid paying the full rate of income tax. In an attempt to defuse the row the four candidates published their tax records.

Mr Liddell-Grainger urged the Government to commit to wholesale reform and simplification of the tax code.

"I think what you do is change the rules to make sure (tax avoidance) can't be done," he said.

"This is a far too complicated system. It's been set up by Parliament, rightly so, over many years and it has got more and more complicated.

"What we need is coherent, cross-government way of dealing with tax evasion and to make sure we get it right.

"We need a lot more research into how we actually stop it ... we can sort this out, we can make it fair. There is a problem with philanthropy, we've got to sort that out, but let's make it fair for everybody across the United Kingdom."

Richard Murphy, a chartered accountant at Tax Research UK, said suggestions that politicians should publish their tax returns would not expose tax avoidance because those seeking to avoid taxation often conceal their income.

"A great deal of tax avoidance is not seen on the tax return itself. One of the first objectives of the tax avoider is to make sure their income is not theirs. They move it into a trust, off-shore, and therefore just publishing a tax return will not tell the whole story," he told BBC Radio 4 Today programme.

He said the Government's proposals for a crack down on avoidance are "far too weak" and called for more company tax information to be published, saying: "Transparency is key. People and companies are embarrassed if their affairs are shown to be contrary to natural justice."

"We have to change the environment, which means a lot more people at HM Revenue and Customs working on this issue."

He added: "A simple tax system would be an advantage. It would be where the left and right can politically agree that quite, clearly, we are using the wrong measures to encourage those behaviours."

He added: "I don't take joy at what most of my fellow accountants seem to want to do. They are going out of their way to find the loopholes and abuse the spirit and will of Parliament. We have straightforward abuse. We are losing vastly more than the revenue we have so far admitted - £12bn or £13bn a year - that could be used to change the political agenda, because if we collected this money we would not need so many cuts."